Eli Lilly CEO Expresses Confidence in New Rheumatoid Arthritis Drug

After a U.S. Food and Drug Administration advisory panel recommended approval on Monday of one of two doses of Eli Lilly and Co.'s (LLY) and Incyte Corp. (INCY) rheumatoid arthritis drug baricitinib, Eli Lilly chairman and CEO David Ricks on an earnings call Tuesday expressed confidence in the benefit-risk profile of both doses of the treatment.

The advisory panel recommended that the FDA approve the 2-mg dose of baricitinib, but not the 4-mg dose for the proposed indication based on the adequacy of the safety and benefit-risk profiles.

"While we are pleased that the FDA's arthritis advisory committee supported the efficacy of both 2 mg and 4 mg of baricitinib in RA and 2 mg overall, we are disappointed that the committee did not recommend approval of the 4-mg dose," Ricks said. "We are confident in the benefit-risk profile of both baricitinib 2 mg and 4 mg for the treatment of patients with RA, supported by the clinical data generated to date and by the experience in more than 40 countries in which both doses are approved and available."

Eli Lilly and Incyte will continue to work with the FDA on the drug application for baricitinib, he said. A World Health Organization report from 2004 showed that 23.7 million people suffered from rheumatoid arthritis.

The company reported non-GAAP earnings per share of $1.34, up 37% from the year-ago period. Revenue rose 9% year-over-year to $5.7 billion. Analysts had forecast, on average, non-GAAP EPS of $1.13 on revenue of $5.51 billion, according to FactSet Research Systems.

The revenue growth was fueled in part by new products including diabetes drugs Trulicity and Jardiance. First-quarter sales of Trulicity grew 82% year-over-year to $678.3 million. Jardiance's sales rose 104% to $151 million.

Eli Lilly raised its outlook for EPS on a reported basis to a range of $4.52 to $4.62, compared with previous guidance of $4.39 to $4.49. It increased its non-GAAP EPS guidance to $5.10 to $5.20, compared to the prior guidance range of $4.81 to $4.91.

The company said it now expects full-year revenue of between $23.7 billion and $24.2 billion, compared with its earlier projection of between $23 billion and $23.5 billion.

Shares of Eli Lilly were trading at $79.80 on Tuesday, down 0.5%. The stock is down 5.5% year-to-date and down 4.3% over the last 12 months.

Also on the call, Ricks said the company is "making expected progress" on its strategic review for Elanco animal health business. The company still anticipates sharing its conclusions during its second-quarter earnings call in July, he said.

Eli Lilly announced in October it was conducting a strategic review for the unit. Elanco on Monday said it has appointed Christopher Jensen, who was most recently with Celanese Corp. (CE) , as chief financial officer.